The U.S. National Association of Realtors reports 23.6% of international home buyers are Canadians, up from 11% in 2007. If you are a Snowbird looking for a Florida cottage, now is a good time to purchase one. Providing you have at least a 30% down payment and a sterling credit rating, you can purchase a U.S. property today for about half of what it was worth in 2006. Credit is very tight in the U.S. because of the current banking crisis, but you could carry a $250,000 Florida property for $1,600 per month, including taxes and condo fees.
Of course, your ability to buy a cheap vacation property may depend largely on how your investments fared on the Toronto Stock Exchange today. This morning, the on-going toxic mortgage crisis in the U.S. finally impacted formerly bullet-proof oil stocks. The TSX dropped a remarkable 10% this morning, but rallied by noon. It was the worst loss since Black Monday in October 1987.
Still, we are better off than Brazil, where the stock market took a 15% dive. European markets also took severe losses, particularly Germany and Austria. Market watchers are predicting this is the start of a global slowdown. Torontonians are seeking the safety of GICs, T-bills, short term bonds, and high interest savings accounts, rather than stocks. The Bank of Canada and the U.S. Treasury may cut interest rates later this week to restore confidence in their markets, so waiting a couple of days before taking out your mortgage may benefit you in the long term.
